The crucial difference between the potentiometer and the rheostat is the use of a potentiometer to calculate the estimated electromotive force (EMF) and thus regulate the voltage of the circuit as compared to the rheostat. A rheostat is an instrument that regulates current flow through a circuit by varying resistance.

We cannot use rheostat as a potentiometer, but on the other hand, a potentiometer can be used as a rheostat. A rheostat is used deliberately in a potentiometer to lower the current of the potentiometer and to keep it constantly in circulation to improve its sensitivity.